NANJING, China, Nov. 11, 2014 (GLOBE NEWSWIRE) -- Tuniu Corporation (Nasdaq:TOUR) ("Tuniu" or the "Company"), a leading online leisure travel company in China, today announced its unaudited financial results for the third quarter ended September 30, 2014.
Highlights for the Third Quarter of 2014
Net revenues in the third quarter of 2014 increased by 85.6% year-over-year to RMB1.31 billion (US$213.7 million1).
Total number of trips from organized tours (excluding local tours) increased by 89.5% year-over-year and the total number of trips from self-guided tours increased by 81.1% year-over-year in the third quarter of 2014.
Mobile traffic contributed over 50% of total online traffic and 35% of total orders in the third quarter of 2014.
Tuniu added 102 regional service centers in the third quarter of 2014 and a further 203 service centers subsequently. As of November 11, 2014, Tuniu had 50 regional service centers throughout China.
Mr. Donald Yu, Tuniu's co-founder and Chief Executive Officer, said, "We are excited to have delivered excellent top-line growth of 85.6% year-over-year in the third quarter as more Chinese leisure travelers turned to Tuniu for packaged tours. This result is a testament to our ability to gain market share through offering a comprehensive product portfolio and industry-leading customer service, combined with competitive pricing."
Mr. Alex Yan, Tuniu's co-founder and Chief Operating Officer, said, "Since the end of the second quarter until now, we have opened an additional 30 service centers. This larger network enables us to bring new and diverse travel options to Chinese leisure travelers living in second and third tier cities, and further improves our local sourcing capabilities. Through the use of targeted offline sales and marketing activities, these new centers also quickly contribute to Tuniu's growth."
Mr. Conor Yang, Tuniu's Chief Financial Officer, said, "President Xi Jinping recently commented that in the next 5 years there will be over 500 million outbound tourist trips from China. We are excited about this potential for growth. We will continue to grow our market share by expanding our customer service network, developing new product offerings, pricing competitively, and investing in online and offline branding initiatives."
Third Quarter 2014 Results
Net revenues were RMB1.31 billion (US$213.7 million) in the third quarter of 2014, representing a year-over-year increase of 85.6% from the corresponding period in 2013. The increase was primarily due to the growth in revenues from both organized tours and self-guided tours. The number of trips sold increased by 68.2% to 792,938 in the third quarter of 2014 from 471,551 in the third quarter of 2013.
Revenues from organized tours, which are recognized on a gross basis, were RMB1.29 billion (US$209.5 million) in the third quarter of 2014, representing a year-over-year increase of 86.3% from the corresponding period in 2013. The increase was primarily due to the rapid growth in demand for travel to certain international destinations, such as Europe, North America, South Korea and Japan, and for domestic tours. In the third quarter of 2014, the number of trips of organized tours (excluding local tours) increased by 89.5% to 262,504 from 138,524 in the same period last year, and the number of trips of local tours increased by 53.2% to 399,238 from 260,575 in the third quarter of 2013.
Revenues from self-guided tours, which are recognized on a net basis, were RMB25.2 million (US$4.1 million) in the third quarter of 2014, representing a year-over-year increase of 58.3% from the corresponding period in 2013. The increase in revenues was primarily due to the growth in travel to the Maldives and certain domestic destinations. Gross bookings5 for self-guided tours increased by 38.7% to RMB492.4 million in the third quarter of 2014 from RMB355.0 million in the third quarter of 2013. The number of trips of self-guided tours increased by 81.1% year-over-year to 131,196 in the third quarter of 2014 from 72,452 in the third quarter of 2013.
Other revenues, were 7.6 million (US$1.2 million) in the third quarter of 2014, representing a year-over-year increase of 43.0% from the corresponding period in 2013. The increase was primarily due to a rise in revenues from tourist attraction tickets and service fees received from insurance companies, which are recognized on a net basis.
Cost of revenues was RMB1.23 billion (US$200.6 million) in the third quarter of 2014, representing a year-over-year increase of 86.3% from the corresponding period in 2013. The increase was in line with the growth of revenues. As a percentage of net revenues, cost of revenues was 93.9% in the third quarter of 2014 compared to 93.5% in the corresponding period in 2013.
Gross margin was 6.1% in the third quarter of 2014 compared to 6.5% in the third quarter of 2013. The decline in gross margin was primarily due to Tuniu's competitive pricing strategy, and the higher costs associated with the new regional service centers, new product lines and newly-added second and third tier departure cities.
Operating expenses were RMB193.1 million (US$31.5 million) in the third quarter of 2014, representing a year-over-year increase of 195.9% from the corresponding period in 2013. Share-based compensation expenses, which were allocated to related operating expense line items, were RMB9.2 million (US$1.5 million) in the third quarter of 2014. Non-GAAP operating expenses, which excluded share-based compensation expenses, were RMB184.0 million (US$30.0 million) in the third quarter of 2014, representing a year-over-year increase of 181.9%.
Research and product development expenses were RMB27.7 million (US$4.5 million) in the third quarter of 2014, representing a year-over-year increase of 198.0%. Non-GAAP research and product development expenses, which excluded share-based compensation expenses of RMB0.3 million (US$43.3 thousand), were RMB27.4 million (US$4.5 million) in the third quarter of 2014, representing an increase of 195.1% from the corresponding period in 2013. The increase was primarily due to investments in new product offerings and mobile related initiatives, and the rise in technology and product development personnel related expenses.
Sales and marketing expenses were RMB120.7 million (US$19.7 million) in the third quarter of 2014, representing a year-over-year increase of 206.1%. Non-GAAP sales and marketing expenses, which excluded share-based compensation expenses of RMB41.9 thousand (US$6.8 thousand), were RMB120.7 million (US$19.7 million) in the third quarter of 2014, representing a year-over-year increase of 206.0% from the corresponding period in 2013. The increase was primarily due to branding campaigns and advertisements for our mobile business expansion.
General and administrative expenses were RMB46.1 million (US$7.5 million) in the third quarter of 2014, representing a year-over-year increase of 170.8%. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses of RMB8.8 million (US$1.4 million), were RMB37.3 million (US$6.1 million) for the third quarter of 2014, representing a year-over-year increase of 118.9% from the corresponding period in 2013. The increase was primarily due to an increase in the headcount of our administrative personnel as a result of our business expansion and an increase in the professional service fees associated with being a public company.
Loss from operations was RMB112.9 million (US$18.4 million) in the third quarter of 2014, compared to a loss from operations of RMB19.5 million in the corresponding period in 2013. Non-GAAP loss from operations, which excluded share-based compensation expenses, was RMB103.7 million (US$16.9 million) in the third quarter of 2014.
Net loss was RMB103.4million (US$16.9 million) in the third quarter of 2014, compared to a net loss of RMB13.2 million in the third quarter of 2013. Non-GAAP net loss, which excluded share-based compensation expenses, was RMB94.2 million (US$15.4million) in the third quarter of 2014.
Net loss attributable to ordinary shareholders was RMB103.4 million (US$16.9 million) in the third quarter of 2014, compared to a net loss attributable to ordinary shareholders of RMB72.6 million in the corresponding period in 2013. Non-GAAP net loss attributable to ordinary shareholders, which excluded share-based compensation expenses, was RMB94.2 million (US$15.4 million) in the third quarter of 2014.
As of September 30, 2014, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1.5 billion (US$244.9 million).
Business Outlook
For the fourth quarter of 2014, Tuniu expects to generate RMB851.2 million to RMB875.5 million of net revenues, which represents 75% to 80% growth year-over-year. This forecast reflects Tuniu's current and preliminary view on the industry and its operations, which is subject to change.
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